Dividend Purification & Zakat on Shares Calculator
How much of a dividend to purify, and the zakat due on the shares you hold.
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- Free preview: the amount to purify in full, with the first rows of the table and the first step of the working; every other figure, the zakat included, is hidden.
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Nisab, debts and your other assets decide your zakat in all: see the zakat calculator.
What to purify and the zakat
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For education only, not investment advice: no tool here tells you what to buy, sell or hold. Results use only the figures you enter, the files you load (read in your browser, never uploaded) and the published rules each page names. Check them against your broker's or exchange's own figures, and consider a licensed or registered adviser for advice on your situation.
About the Dividend Purification & Zakat on Shares Calculator
When a company you hold earns part of its income from interest or from activities that are not permissible, a part of the dividend it pays you carries that income. Purification gives that part away to charity. This calculator works it out two common ways: the dividend times the company’s non-compliant share of its income, or the company’s non-compliant income a share times the shares you held and the part of the year you held them. If you follow the view that a gain on a sale is purified too, it can add that.
It also works out zakat on the shares: on their market value when you hold them to trade, or on the zakatable assets behind them when you hold them to keep — or on a share of the market value you choose — at 2.5% for a lunar year or the solar-year equivalent. Nisab and your other assets are for the zakat calculator. Nothing you type leaves your browser.
How to use it
- Choose how to purify: the dividends times the company’s non-compliant share of income, or its non-compliant income a share times your shares.
- Enter the dividends you received and the non-compliant share (from the company’s accounts or a screening report) — or the income a share, your shares and the part of the year you held them.
- If you purify gains too, tick it and enter the gain and the share to give away.
- For zakat, enter the shares and their market price, and whether you hold them to trade or to keep; for shares you keep, the zakatable assets a share or a share of the market value; pick the lunar or the solar rate.
- Read the amount to purify and the zakat; then copy the summary or download the table as CSV — with a pass, or after unlocking this result.
Examples
1,000 of dividends from DEMO Co., whose non-compliant income is 3% of its income
1,000 × 3% = 30.00 to purify
1,000 DEMO shares at 50 (worth 50,000), a lunar year
50,000 × 2.5% = 1,250.00
1,000 shares, zakatable assets of 12 a share, a lunar year
1,000 × 12 × 2.5% = 300.00
Common uses
- Work out how much of this year’s dividends to give away.
- Add the zakat on shares you trade or keep to your yearly zakat.
- Compare the purification methods of different providers on your own holding.
The formulas
- Purification of dividends = dividends × the company’s non-compliant share of its income (its interest and impermissible income ÷ its revenue or total income, as your method says). MSCI’s Islamic indexes apply the same idea to reinvested dividends: the factor (total income − prohibited revenue − interest income) ÷ total income keeps the compliant part (MSCI Islamic Index Series methodology (dividend purification)).
- Per share = the company’s non-compliant income a share × your shares × the share of the year you held them.
- Gains, if you purify them = the gain × the share you choose.
- Zakat on shares held to trade = market value × rate; to keep = shares × zakatable assets a share × rate, or the share of the market value you choose × rate.
- Rate: 2.5% for a lunar (Hijri) year; for a year of 365 days, 2.5% ÷ 354 × 365 = 2.5777%, the rule ZATCA applies to a zakat year that is not a Hijri year (ZATCA: Implementing Regulation for Zakat Collection (Article 15)).
The common methods: Zoya help centre: how to calculate purification · Zoya help centre: zakat on stocks.
Reading the results
- The amount to purify is what you give away to charity: it is worked out apart from your zakat.
- Zakat on the shares is only one part of your zakat: add it to your other assets and check the nisab in the zakat calculator.
- Methods differ between scholars and screening providers: the table shows each figure with its basis and rate, so you can follow your own.
What it leaves out
- Which income is non-compliant: the share comes from the company’s accounts or a screening report; see the Shariah stock screening calculator for its ratios.
- Nisab, debts and other assets, which decide whether and how much zakat you owe in all.
- Funds and ETFs, whose purification and zakat depend on every holding inside them.
Limitations
- The methods and rates are the common ones, filled in as starting points: scholars and screening providers differ, so follow the one you trust.
- The non-compliant share and the zakatable assets a share come from the company’s accounts: they change every year.
- This is a calculation, not a fatwa or a recommendation: ask a qualified scholar about your own case.
Privacy
Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.
Frequently asked questions
What do I get without a pass?
Without a pass, Dividend Purification & Zakat on Shares Calculator shows the amount to purify in full, with the first rows of the table and the first step of the working; every other figure, the zakat included, is hidden. Until you unlock it, the result can’t be downloaded or copied. A Pro, Premium or Ultimate pass, a one-time payment that never renews, unlocks the full result. The pricing page lists the passes and their prices.
How do I calculate dividend purification?
Multiply the dividends you received by the company’s non-compliant share of its income: 1,000 of dividends from a company whose interest and impermissible income are 3% of its income gives 30 to purify.
Do I have to purify capital gains?
Scholars differ: many purify dividends only, others a share of a gain too. The calculator leaves gains out unless you tick them in.
How is zakat on shares calculated?
For shares held to trade, on their market value: 2.5% for a lunar year. For shares held to keep, on the zakatable assets behind them — your shares times the company’s zakatable assets a share — or on a share of the market value your method uses.
What is the zakat rate for a solar year?
A solar year is longer than a lunar one, so the rate is scaled up: 2.5% ÷ 354 × 365 = 2.5777% for 365 days, as ZATCA applies it to a zakat year that is not a Hijri year.
Is purification the same as zakat?
No. Purification gives away income that should not have been earned; zakat is due on the wealth you own. A holding can need both.
Where do I find a company’s non-compliant income?
In its accounts (interest income and the revenue of its excluded activities) or in a screening provider’s report. The Shariah stock screening calculator works out the same ratio from the company’s figures.